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Perry Government Mishandles Programs that Benefit Consumers, Groups Say

Aug. 3, 2010

Perry Government Mishandles Programs that Benefit Consumers, Groups Say

Public Citizen, Environmental Defense Fund Call for Independent State Agency to Coordinate State’s Energy Efficiency Efforts

AUSTIN – In response to the Public Utility Commission’s (PUC) planned adoption of new energy efficiency goals, Public Citizen and Environmental Defense Fund today called for sweeping changes to the way Texas runs its energy efficiency programs. The groups said that a single independent state agency would better serve Texas because it could coordinate programs currently regulated by multiple agencies and reduce agency overlap.

“We have no confidence in the Public Utility Commission process,” said David Power, deputy director of Public Citizen’s Texas office. “The time has come to change the way Texas saves energy because the current setup is ineffective. It is time for the Legislature to take control and create a new state agency that can put consumers first and save more money.”

The groups plan to send a letter to state Sen. Troy Fraser, chair of the Senate Natural Resources Committee, and state Reps. Jim Keffer and Burt Solomons, chairs of the House Energy Resources and State Affairs Committees, asking them to support legislation in the upcoming session to create an independent efficiency agency.

Under current law, the PUC, the agency in charge of regulating most of the state’s “poles and wires” companies, is supposed to review and approve the energy efficiency programs of the utilities. But other state agencies oversee efficiency programs too, including the Department of Housing and Community Affairs and State Energy Conservation Office. Housing the coordination of these efforts under one roof would help streamline state regulation and create more savings potential for Texans, the groups said.

“Several agencies either run or oversee similar programs,” said Kate Robertson, energy efficiency specialist with Environmental Defense Fund. “In some instances, like market outreach, a single state agency could coordinate the activities of all efficiency programs instead of multiple people doing the same thing for their own programs.”

The groups also criticized the PUC’s negative attitude toward energy efficiency. Over the past year and a half, agency staff had been developing plans to increase the state’s goal for energy efficiency. On Friday, however, the three commissioners appointed by Gov. Rick Perry slashed the proposal dramatically, ostensibly for cost reasons, reducing the efficiency goal from 1 percent of peak demand by 2014 to a third of the growth in demand by 2013 – a much smaller increase. The PUC even has proposed curtailing the amount utilities can spend on efficiency measures.

“It is baffling to us that the commission thinks energy efficiency is not worth the cost,” said Matthew Johnson, a policy analyst with Public Citizen’s Texas office. “Ratepayers’ utility bills pay primarily for fuel like natural gas and coal, power plants and the grid infrastructure. Energy efficiency costs around a dollar per month on a typical $100 electric bill and it pays for itself by reducing the need for new, costly power plants.”

Energy efficiency has had a long track record of success since the Legislature passed the first statewide goal as part of the massive 1999 electric deregulation bill. In recent years, several independent and internal reports on energy efficiency potential and cost effectiveness have been published for the PUC. None of them, however, appear to have persuaded the commission to pursue energy efficiency as a consumer-friendly energy resource.

“There are at least four internal PUC and independent reports done in the last four years that show Texas can achieve higher energy efficiency goals” said Robertson. “Every one of them shows that efficiency saves consumers money and has a payback of 2 or 3 to 1. An independent agency’s primary focus would be on achieving these goals and saving Texans money on their energy bills.”

Agencies that manage non-electric efficiency programs, like the Water Development Board and potentially the Railroad Commission for natural gas, the groups note, also could be incorporated into the new efficiency agency. This would enhance the state’s ability to increase program participation by creating a “one-stop shop” for consumer information on electric, water and gas efficiency programs.

The groups urged citizens and businesses to contact their state representatives, who convene again in January, to call for an independent efficiency agency.